In the present project we plan to develop several theoretical models aimed at understanding the current state of the health care market. Those models will be used to evaluate various measures that have been proposed in the literature as well as those that ar expected to be proposed by the Health Care Reform Task Force. The models that we plan to develop will use recent advancements in the literatures of Regulation, Industrial Organization, and Information Economics. Recent advancements in the above-mentioned literature that make it most appropriate for the understanding of health care markets is the focus on asymmetric information and on institutional details. Since the relationship among participants in health care markets is characterized by great asymmetries of information and since the structure of health care markets is far more complex than many other industries, such a focus makes this literature extremely useful. There are three different dimensions of the decisions made by providers that we plan to focus on. The first is the provider's decision concerning investment in capacity as determined by the size of the population it serves, by the extent of uncertainty about the patients' demand, by the level of investment of other providers, and by the form of regulatory restrictions imposed by the government. The second dimension relates to the mechanism underlying the choices made by providers about the type of treatment to administer to patients suffering from a certain disease, when a variety of treatments is available and when the complexity underlying different cases can be privately observed by the provider. Each available treatment may be most effective to treat a case of certain complexity and each may vary in cost. We wish to highlight the role of the reimbursement rule and the malpractice law in determining the choice of treatment made by the provider. The third dimension of the provider's decision that we plan to address relate to his tendency to focus on quality vs. price competition with other providers as implied by coinsurance rates, by the reimbursement rules and contract terms agreed upon with sponsors, and the extent of forced cross subsidations from high income to low income individuals that is aimed at reducing the size of the population that remains uninsured. Our objective is to evaluate the implications of various proposals currently considered upon the above three dimensions of the provider's decision making, and predict how this decision making affects health care costs, the quality of care provided to patients, and the size of the uninsured population.